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Lenders seek MMR rule waivers

The FCA has waived elements of the MMR rules for two mortgage lenders after a number of firms applied to be made exempt from aspects of the new regime in the run-up to implementation.

In the first three months of this year the regulator made decisions on six applications from mortgage and bridging lenders to waive or modify a rule relating to the MMR. Of those, two were approved and four withdrew.

Among the MMR rules which lenders requested to be waived were those relating to affordability assessments, interest-only mortgages and equity release.

The regulator has also received a number of applications from fund providers to waive or modify the changes to pension illustrations which came into force on 6 April.

Under the new requirements, investment projection rates have been cut from 5, 7 and 9 per cent to 2, 5 and 8 per cent, and have to factor in inflation at 2.5 per cent.

The FCA rejected six applications to waive pension illustration rules in Q1, and a further three withdrew. No applications were approved.

The FCA has the power to waive or modify handbook rules, and says it will do so if a firm can demonstrate that complying with the rule would be unduly burdensome or not achieve its purpose, and if granting the waiver will not adversely affect any of its operational objectives.

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